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NewsDanny McCance
16 Apr 2018 04:16pm

Business tax relief in need of reform

While the UK’s tax relief climate encourages entrepreneurial activity, the application of reliefs in business can lead to complication and confusion

A report from the Office of Tax Simplification (OTS) has found that the confusion on reliefs and their applications is compounded by the fact that some are not known or are being misunderstood by businesses.

“In consequence, not all businesses receive the support through the tax system that would enable them to flourish,” the report stated.

The OTS made 12 headline observations across five different areas of a businesses lifecycle from start-up to disposal.

It questioned the cost of Entrepreneurs Relief (ER), which it found is more than any other relief it examined.

The OTS also recommended that HMRC create a “one-stop shop” using third-party software, to help ease the administrative burden for small incorporated businesses that have to register with both HMRC and Companies House.

“SEIS, EIS and VCT have common features but also a number of differences which mean they attract different types of investors who invest for different reasons. Whether those reasons are consistent with the capital needs and future business aims of the companies concerned is unclear,” it said.